FEAR & GREED | Business News Why private credit is booming
Dec 28, 2025
Roger Montgomery, the founder and CIO of Montgomery Investment Management, delves into the booming world of private credit. He discusses how banks have retreated from business lending, creating a significant gap filled by non-bank lenders. With retirees seeking stable income, private credit has gained traction. Roger highlights essential factors for investors, such as independent credit ratings and risks associated with property lending. He also offers strategic advice on integrating private credit into a balanced portfolio.
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Bank Retreat Created Lending Gap
- Banks have pulled back from many business loans after the GFC due to tighter regulation and higher capital requirements.
- Non-bank originators have filled a $300–$400bn lending gap to small and medium corporates in Australia.
Originators Fuel Private Credit Supply
- New non-bank lenders (originators) run by ex-bankers now provide secured loans that banks used to make.
- These lenders source capital from private credit funds that pool investor money to finance business growth.
Boomer Retirement Drives Demand
- Demographic demand from retiring baby boomers seeking income has boosted private credit's appeal.
- Supply from originators meeting demand from income-seeking investors created rapid market growth.